Hungary Opposition Alliance Seek Industry-Tax Phasing Out

Feb. 19 (Bloomberg) -- Hungary’s opposition alliance,
trailing Prime Minister Viktor Orban’s party ahead of an April
election, agreed to phase out or overturn a spate of government
measures including extraordinary industry taxes if they win.

Reinstating a two-round election procedure, which Orban
scrapped, as well as removing curbs to the Constitutional
Court’s jurisdiction put in place by his Fidesz party, are also
part of the common program, Attila Mesterhazy, the head of the
Socialist Party and the alliance’s prime minister-candidate,
said on his website today.

Orban, whose Fidesz leads all opinion polls ahead of the
April 6 ballot, has consolidated his power using his two-thirds
parliamentary majority, extending influence over independent
institutions including the courts, media regulator, central bank
and election authority. The opposition has said the changes to
voting rules included gerrymandering in some election districts
aimed at reducing their chances of winning.

“We pledge to rebuild the constitutional state, including
a democracy based on the system of checks and balances,” the
opposition alliance said in a statement.

Fidesz had 30 percent support among eligible voters in
February, compared with 23 percent for the opposition union
known as Osszefogas, or alliance, and 36 percent who said they
were undecided, according to a Feb. 1-9 Ipsos poll that had a
margin of error of 2.5 percent.

Orban has relied on extraordinary industry levies,
including a bank tax, to reduce the budget deficit below the
European Union ceiling of 3 percent of economic output. He has
also used it to compensate for a drop in personal income-tax
revenue after the introduction of a flat 16 percent rate.

The government has called the industry taxes a “fair
sharing” of the burden, while the opposition alliance today
called them “penalizing and predatory.”

The extraordinary taxes contributed to a plunge in private
investment and lending and have rendered the economy’s growth
potential “worryingly low,” the Organization for Economic
Cooperation and Development said in a Jan. 27 report.

The economy grew 2.7 percent in the fourth quarter of last
year, the most since 2006, as agriculture, industrial production
and construction drove expansion, the statistics office said on
Feb. 14 in a preliminary estimate.